Louisiana officials have announced that the state's tax collections have remained surprisingly strong in the wake of last fall's devastating hurricanes.
The state originally predicted that tax revenues would drop by about $900 million for the 2005-06 fiscal year, but instead, the state is on track to collect a record $9.2 billion by June 30, according to published reports.
State officials have said that part of that revenue is coming from the gambling industry, as well as higher oil and gas prices. However, the largest contributor to the state's coffers has been the revenue stream from sales taxes. Officials estimate that the state will end up with about $500 million more in sales tax revenue than was expected after the storms hit.
The state is using the surplus cash to cover nonrecurring costs, such as improvements to health care and economic development programs, and has also set aside about $150 million to pay for hurricane evacuations and help pay bills from the Federal Emergency Management Agency, which requires states to pick up some of the cost of disaster recovery. Individual cities, such as New Orleans, still face significant unknowns, such as major drops in assessed property values.
The state Division of Administration also announced last Friday that it will sign a contract committing state dollars to retain Deloitte & Touche to aid the state in providing assistance in evaluating the disbursement of FEMA recovery dollars. The firm had been selected last year after a solicitation process, but FEMA was slow in determining whether federal recovery dollars could be used for the oversight job. The contract should be finalized next week.
Previously on WebCPA:
